rp-14-25.pdf

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# Part III

Administrative, Procedural, and Miscellaneous

26 CFR 601.105: Examination of returns and claims for refund, credit, or abatement;
determination of correct tax liability.
(Also: Part I, §911, 1.911-1)

Rev. Proc. 2014-25

## SECTION 1. PURPOSE

.01 This revenue procedure provides information to any individual who failed to
meet the eligibility requirements of section 911(d)(1) of the Internal Revenue Code
because adverse conditions in a foreign country precluded the individual from meeting
those requirements for taxable year 2013.

.02 This revenue procedure lists the countries for which the eligibility
requirements of section 911(d)(1) are waived for taxable year 2013.

## SECTION 2. BACKGROUND

.01 Sections 911(a) and (c)(4) of the Code allow a "qualified individual," as
defined in section 911(d) to exempt from taxation the individual's foreign earned income

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and the housing cost amount.

.02 Section 911(d)(1) of the Code defines the term "qualified individual" as an
individual whose tax home is in a foreign country and who is (A) a citizen of the United
States and establishes to the satisfaction of the Secretary of the Treasury that the
individual has been a bona fide resident of a foreign country or countries for an
uninterrupted period that includes an entire taxable year, or (B) a citizen or resident of
the United States who, during any period of 12 consecutive months, is present in a
foreign country or countries during at least 330 full days.

.03 Section 911(d)(4) of the Code provides an exception to the eligibility
requirements of section 911(d)(1). An individual will be treated as a qualified individual
with respect to a period in which the individual was a bona fide resident of, or was
present in, a foreign country, if the individual left the country during a period for which
the Secretary of the Treasury, after consultation with the Secretary of State, determines
that individuals were required to leave because of war, civil unrest, or similar adverse
conditions that precluded the normal conduct of business. An individual must establish
that but for those conditions the individual could reasonably have been expected to
meet the eligibility requirements.

.04 For 2013, the Secretary of the Treasury, in consultation with the Secretary of
State, has determined that war, civil unrest, or similar adverse conditions precluded the
normal conduct of business in the following countries beginning on the specified date:

Date of Departure

Country
Egypt

On or after
July 3, 2013

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Lebanon

September 5, 2013

Pakistan

August 9, 2013

Yemen

August 6, 2013

Accordingly, for purposes of section 911 of the Code, an individual who left one
of the foregoing countries on or after the specified departure date during 2013 shall be
treated as a qualified individual with respect to the period during which that individual
was present in, or was a bona fide resident of, such foreign country, if the individual
establishes a reasonable expectation of meeting the requirements of section 911(d) but
for those conditions.

.05 To qualify for relief under section 911(d)(4) of the Code, an individual must
have established residency, or have been physically present, in the foreign country on
or prior to the date that the Secretary of the Treasury determines that individuals were
required to leave the foreign country. Individuals who establish residency, or are first
physically present, in the foreign country after the date that the Secretary prescribes
shall not be treated as qualified individuals under section 911(d)(4) of the Code. For
example, individuals who are first physically present or establish residency in the Egypt
after July 3, 2013, are not eligible to qualify for the exception provided in section
911(d)(4) of the Code for taxable year 2013.

### SECTION 3. INQUIRIES

A taxpayer who needs assistance on how to claim this exclusion, or on how to
file an amended return, should contact a local IRS Office or, for a taxpayer residing or
traveling outside the United States, the nearest overseas IRS office.

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# SECTION 4. DRAFTING INFORMATION

The principal author of this revenue procedure is Kate Y. Hwa of the Office of
Associate Chief Counsel (International). For further information regarding this revenue
procedure contact Kate Y. Hwa on (202) 317-6934 (not a toll free call).